August 2019 Newsletter

With several weeks still left of summer, the nights are starting to get cooler and fall is definitely in the air. Developers, communities, and destination marketing organizations are gearing up for the fall and winter show season and your time to plan is now. Potential retirees are still looking for those perfect locations to relocate and a showing off your fall colors and mild seasons may just win their hearts.

Are you ready to experience the Roaring 20s Returns…Recruiting Retirees in a New Decade?We’ve extended the Early Bird Pricing through October 15 for the annual conference in Chattagnooga so sign-up today at www.the-aarc.org! We’re so excited to share the flapabout this year with sessions such as, “What Marketing and Retirement Have in Common” and “Immersive Technology Is Changing The Buyer, and Traveler Journey, Are You Ready?”We look forward to seeing you November 6-8!

Sincerely,

Rachel Baker Chair, The AARC

AARC Annual Conference with 5 National Speakers plus Many More!

Roaring 20s Returns….Recruiting Retirees in a New Decade

Chattanooga, Tennessee – November 6th – 8th, 2019

The AARC Annual Conference is pouring new energy and ideas into the retiree community industry.

The AARC Annual Conference is coming — join us and learn where things are GOING:

You’ll enjoy a huge roster of speakers and educators this year. And leading it off, five incredible speakers will share their energy, insight and do-this-now tools for succeeding in the new era of the retiree community industry.

We look forward to hosting YOU at our high-energy, high quality 2019 Annual Conference in Chattanooga, Tennessee!

Existing-Home Sales Climb 2.5% in July

Quintin Simmons, NAR | August 21, 2019

WASHINGTON (August 21, 2019) – Existing-home sales strengthened in July, a positive reversal after total sales were down slightly in the previous month, according to the National Association of Realtors®. Although Northeast transactions declined, the other three major U.S. regions recorded sales increases, including vast growth in the West last month.

Total existing-home sales1, https://www.nar.realtor/existing-home-sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 2.5% from June to a seasonally adjusted annual rate of 5.42 million in July. Overall sales are up 0.6% from a year ago (5.39 million in July 2018)

“Falling mortgage rates are improving housing affordability and nudging buyers into the market,” said Lawrence Yun, NAR’s chief economist. However, he added that the supply of affordable housing is severely low. “The shortage of lower-priced homes have markedly pushed up home prices.”

Home price appreciation has been much stronger in the lower-price tier compared to homes sold in the upper-price tier, based on the analysis of proprietary deed records data from Black Knight, Inc. and Realtors Property Resource®.

Of the same homes that were sold in 2018 that were purchased in 2012 in 13 large metro areas (repeat sales transactions), the lower half of the market had increased by more than 100% in 2018 in metro areas like Atlanta-Sandy-Springs-Roswell, Ga. (165%), Denver-Aurora-Lakewood, Colo. (103%), Miami-Fort-Lauderdale, Fla. (119%) and Tampa-St. Petersburg-Clearwater, Fla. (125%). The median home price for homes purchased in the upper half of the market in these same metro areas in 2012 increased at a much slower pace when sold in 2018.

“Clearly, the inventory of moderately-priced homes is inadequate and more home building is needed,” said Yun. “Some new apartments could be converted into condominiums thereby helping with the supply, especially in light of new federal rules permitting a wider use of Federal Housing Administration (FHA) mortgages to buy condo properties.”

The median existing-home price2 for all housing types in July was $280,800, up 4.3% from July 2018 ($269,300). July’s price increase marks the 89th straight month of year-over-year gains.

Total housing inventory3 at the end of July decreased to 1.89 million, down from 1.92 million existing-homes available for sale in June, and a 1.6% decrease from 1.92 million one year ago. Unsold inventory is at a 4.2-month supply at the current sales pace, down from the 4.4 month-supply recorded in June and down from the 4.3-month supply recorded in July of 2018.

Properties typically remained on the market for 29 days in July, up from 27 days in June and up from 27 days in July of 2018. Fifty-one percent of homes sold in July were on the market for less than a month.

According to Freddie Mac, the average commitment rate(link is external) for a 30-year, conventional, fixed-rate mortgage decreased to 3.77% in July, down from 3.80% in June. The average commitment rate across all of 2018 was 4.54%.

“Mortgage rates are important to consumers, but so is confidence about the nation’s overall economic outlook,” Yun continued. “Home buying is a serious long term decision and current low or even lower future mortgage rates may not in themselves meaningfully boost sales unless accompanied by improved consumer confidence.”

First-time buyers were responsible for 32% of sales in July, down from 35% the month prior and about equal to the 32% recorded in July 2018. NAR’s 2018 Profile of Home Buyers and Sellers – released in late 20184 – revealed that the annual share of first-time buyers was 33%.

As the share of first-time buyers rose, individual investors or second-home buyers, who account for many cash sales purchased 11% of homes in July, up from 10% recorded in June 2019 and down from 12% recorded in July a year ago. All-cash sales accounted for 19% of transactions in July, up from June and down from July of 2018 (16% and 20%, respectively).

Distressed sales5 – foreclosures and short sales – represented 2% of sales in July, unchanged from June but down from 3% in July 2018. Less than 1% of July 2019 sales were short sales.

“Present rates have opened the market for a number of potential buyers who couldn’t afford a home just a year ago,” said NAR President John Smaby, a second-generation Realtor® from Edina, Minnesota, and broker at Edina Realty. “Additionally, NAR has been working with the FHA for years to establish new condominium loan policies. Our hard work has paid off, and this change will begin benefiting buyers, sellers and our members as soon as this fall.”

Regional Breakdown

Compared to June, existing-home sales recorded in July rose in the Midwest, South and West, but fell slightly in the Northeast region. Compared to last year, July sales dropped in the Northeast and West while experiencing modest gains in the Midwest and South. Median home prices rose from a year ago, except in the Northeast.

July existing-home sales in the Northeast decreased 2.9% to an annual rate of 660,000, a 4.3% decline from a year ago. The median price in the Northeast was $305,800, down 1.0% from July 2018.

In the Midwest, existing-home sales edged up 1.6% to an annual rate of 1.27 million, which is a 0.8% increase from July 2018. The median price in the Midwest was $226,300, an 8.1% surge from a year ago.

Existing-home sales in the South increased 1.8% to an annual rate of 2.31 million in July, up 2.7% from a year ago. The median price in the South was $245,100, up 5.2% from one year ago.

Existing-home sales in the West shot up 8.3% to an annual rate of 1.18 million in July, just 0.8% below a year ago. The median price in the West was $408,000, up 3.7% from July 2018.

Single-family and Condo/Co-op Sales

Single-family home sales sat at a seasonally adjusted annual rate of 4.84 million in July, up from 4.71 million in June and up 1.0% from a year ago. The median existing single-family home price was $284,000 in July 2019, up 4.5% from July 2018.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 580,000 units in July, about equal to the rate from the prior month and down 3.3% from a year ago. The median existing condo price was $254,300 in July, which is up 2.5% from a year ago.

The National Association of Realtors® is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.

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NOTE: For local information, please contact the local association of Realtors® for data from local multiple listing services. Local MLS data is the most accurate source of sales and price information in specific areas, although there may be differences in reporting methodology.

1Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR rebenchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs. Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90% of total home sales, are based on a much larger data sample – about 40% of multiple listing service data each month – and typically are not subject to large prior-month revisions.

The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Single-family data collection began monthly in 1968, while condo data collection began quarterly in 1981; the series were combined in 1999 when monthly collection of condo data began. Prior to this period, single-family homes accounted for more than nine out of 10 purchases. Historic comparisons for total home sales prior to 1999 are based on monthly single-family sales, combined with the corresponding quarterly sales rate for condos.

2The median price is where half sold for more and half sold for less; medians are more typical of market conditions than average prices, which are skewed higher by a relatively small share of upper-end transactions. The only valid comparisons for median prices are with the same period a year earlier due to seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if additional data is received.

The national median condo/co-op price often is higher than the median single-family home price because condos are concentrated in higher-cost housing markets. However, in a given area, single-family homes typically sell for more than condos as seen in NAR’s quarterly metro area price reports.

3Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982 (prior to 1999, single-family sales accounted for more than 90% of transactions and condos were measured only on a quarterly basis).

4Survey results represent owner-occupants and differ from separately reported monthly findings from NAR’s Realtors® Confidence Index, which include all types of buyers. Investors are under-represented in the annual study because survey questionnaires are mailed to the addresses of the property purchased and generally are not returned by absentee owners. Results include both new and existing homes.

5Distressed sales (foreclosures and short sales), days on market, first-time buyers, all-cash transactions and investors are from a monthly survey for the NAR’s Realtors® Confidence Index, posted at nar.realtor.

NOTE: NAR’s Pending Home Sales Index for July is scheduled for release on August 29, and Existing-Home Sales for August will be released September 19; release times are 10:00 a.m. ET.

Home price gains slowed in June, but low mortgage rates may heat them up again

Diana Olick, CNBC.com | August 27, 2019

KEY POINTS

Home prices in June rose 3.1% annually, according to the S&P CoreLogic Case-Shiller national home price index. That’s down from 3.3% annual gain in May.

The 10-City Composite annual increase came in at 1.8%, down from 2.2% in May. The 20-City Composite rose 2.1% annually, down from 2.4% in the previous month.

Another read showed home prices in the second quarter up 5% from the second quarter of 2018.

Home prices are still gaining nationally, but not nearly as much as they have been over the past few years.

Prices in June rose 3.1% annually, according to the S&P CoreLogic Case-Shiller national home price index. That’s down from 3.3% annual gain in May.

The 10-City Composite annual increase came in at 1.8%, down from 2.2% in May. The 20-City Composite rose 2.1% annually, down from 2.4% in the previous month.

“Home price gains continue to trend down, but may be leveling off to a sustainable level,” S&P Dow Jones Indices’ Philip Murphy said in a release. “Fewer cities (12) experienced lower YOY price gains than in May (13).

Phoenix, Las Vegas and Tampa reported the highest annual gains among the 20 cities. In June, Phoenix saw a 5.8% annual price increase, followed by Las Vegas with a 5.5% increase and Tampa with a 4.7% increase. Six of the 20 cities reported greater price increases in the year that ended in June versus the year that ended in May. Seattle was the only city to show prices down (1.3%) from June 2018.

Home prices will likely get a boost from the significant, continuing drop in mortgage rates that began in the spring. The average rate on the 30-year fixed mortgage is now a full percentage point lower than it was a year ago. Lower mortgage rates give consumers more buying power and tend to push home prices higher.

“The U.S. National Home Price NSA Index YOY price change in June 2019 of 3.1% is exactly half of what it was in June 2018,” said Murphy, managing director and global head of Index Governance at S&P Dow Jones Indices. “While housing has clearly cooled off from 2018, home price gains in most cities remain positive in low single digits. Therefore, it is likely that current rates of change will generally be sustained barring an economic downturn.”

Another read showed home prices in the second quarter of this year up 5% from a year earlier. The measure, from the Federal Housing Finance Agency, looks at prices on homes with loans backed by Fannie Mae and Freddie Mac, which are conforming loans. It therefore does not capture the high end of the market. It shows home price gains decelerating for the fifth straight quarter, but also notes that may be about to change.

“We expect some positive effect of the mortgage interest rate decline on housing demand as well as home price appreciation given that rates have fallen a full percentage point since the end of 2018 to below 4% in August,” Lynn Fisher, FHFA’s senior advisor for economics, said in the release. “This should lead to a longer summer buying season and potentially a higher rate of appreciation on a seasonally adjusted basis than would have previously been expected in the third quarter.”

4 Ways AI Can Make Your Business More Efficient

From chatbots that offer feedback to clients 24/7 to lead-generating ad campaigns, find out how artificial intelligence can work for you.

Artificial intelligence, which is predicted to grow to an $89.8 billion industry by 2025, is already having a profound effect on consumers—but it will also significantly impact real estate professionals. From chatbots that handle clients’ needs to smarter ad campaigns that produce high-quality leads, AI is changing the way agents work.

Here’s how the technology will impact the buying and selling process for agents and brokers.

Provide accurate property valuations.
Determining property value can be challenging. You must evaluate as many factors as possible to give a fair price. However, the assessment no longer has to be done manually.

Automated valuation models, or AVMs, use regression analysis to estimate the market value of a property accurately by looking at similar properties that recently sold in the market. You can leverage machine learning software to analyze vital information, such as changes in the local neighborhood, schools, public transportation, and other factors, to assess property values. This enables you to dig deeper beyond the previous sale price to provide a more precise property value.

AI software can also streamline the negotiation process by predicting where a price compromise is likely to happen. You can prevent business losses that may result from giving a property price that’s too low or too high. With AI, you can be assured that an initial offer is well within the market price and that you have the data to back it up.

Create better ad campaigns for lead generation.AI is improving how ads target consumers so you can get in front of more people. Instead of spending time and resources to set up an ad campaign manually, you can let AI do the hard work for you.

From ad creation and targeting to custom video listings, AI is a powerful tool that can help increase lead generation. AI-based software can automatically generate suggested ad campaigns by detecting your new listings and upcoming open houses in the MLS. With every new lead, the system then notifies you via a text message and email. You’ll also be able to access detailed reporting that shows ad performance and specific insights about who the ad has reached. This helps you save time to focus on other meaningful business tasks.

Engage clients and increase lead conversions.
You aren’t available to speak to potential clients around the clock. However, chatbots are ready to interact 24/7 with online leads that come to you via your website. Sixty-nine percent of consumers prefer chatbots for quick communication with brands, according to The 2018 State of Chatbots Report.

Chatbots can prompt customers to ask questions and instantly respond to queries about a property, such as those related to square footage, lot size, number of bedrooms, and any other details. Using machine learning, you can discover more about a client’s home search and preferences and then respond to more complex questions over time. Chatbots can also make personalized offerings based on a specific user’s preferences.

While chatbots will not replace you entirely, they make it easier for you to qualify online leads and increase transactions. Many agents have managed to increase property closings by using chatbots and personal assistants.

Streamline data management.
You deal with massive amounts of data involving legal papers, appraisal reports, zoning regulations, and other crucial documents. Although documents have become digital, humans must still sift through all of the data. However, AI makes it possible to manage data faster and more thoroughly without the human eye.

AI-based tools can spot inaccuracies in data by continually analyzing it. These tools can send notifications to you in the event of any inconsistencies, such as empty MLS fields, missing signatures, legal mistakes, and invalid characters.

You can use AI-powered software to conduct demographic market research and financial and environmental analysis. Software that uses machine learning can recognize patterns in the data to generate actionable insights. For example, with enough relevant data, AI can predict when a particular type of property will increase in popularity.

Much of AI has yet to enter the real estate industry. However, it’s gaining traction quickly. Agents that are prepared to embrace AI-based technologies will take their business to new heights and remain competitive in a changing landscape.